The UAE government has taken active steps to promote business, trade, and investment opportunities in the nation through several long-term and immediate initiatives. While setting up a business in the UAE can reward entrepreneurs with lucrative profits and access to the global markets, it is mandatory for companies to obtain the correct trade licenses to carry out business operations legally in the emirate.
Licenses are necessary because they help build trust among consumers, indicating that a company is legitimate and complies with governmental laws and regulations. If you want to launch a company in the UAE, you must have the appropriate trade license to ensure proper business establishment in the future.
When it comes to trade licenses, there are several of them. You need to take your industry, business type, jurisdiction, and company structure into consideration to decide which type of license you must issue for your company. You can speak to your business consultant to guide you through the process for better clarity and understanding.
Typically, you need to keep the following in mind before choosing the type of trade license for your business –
- Type of business
- Business activities
- Name of the business
- Legal structure of the company
- Investment requirements
- Office space requirements
- Visa Requirements
Types of Trade Licenses in the UAE
Choosing the right business license is paramount for your company’s future in the UAE. There are mainly six types of business licenses across the UAE. Let’s take a look at them –
You’ll need a commercial license to perform any commercial trade activity in the UAE. If your business involves the selling of tangible products, then you need a commercial trade license. Activities that would fall under the commercial license include –
• General trading
• Software trading
• Electronic trading
A foreign investor or ex-pat can now own 100% of the total shares with a commercial license. The remaining 51 percent will be held by a UAE local or local service agent. A limited liability company (LLC) can request a commercial license.
Business activities like moulding, casting, or processing would require an industrial license. It would also include the production of raw materials and semi-finished goods. It could consist of the manufacture of garments, meat, dairy, furniture, or appliances.
For an industrial license, you need to register your business at the Department of Economic Development (DED). Additionally, the Chamber of Commerce and Industry will be involved in issuing an industrial license in the UAE.
As suggested by the name, professional licenses are meant for professionals in all fields. In order to apply for a professional license, based on the activity of the business, it may require to have a local service agent or sponsor.
A professional license is usually granted to individuals on the basis of their qualifications and expertise in the field. Some of the professionals who seek this type of license include –
• HR or Management Consultants
A civil company may also require a professional license. Therefore, partners with professional licenses are eligible to establish a civil company.
If your company plans on using a special knowledge or skill set and providing the service for a fee, seeking a professional service is necessary. A professional license gives ex-pats 100% ownership, allowing them to be the sole owner. The license holder can establish a business in the UAE, provided they take sole responsibility for all liabilities and debts.
A tourism license is issued for enterprises focusing on travel and tourism activities. The company can either be a 100% local establishment or an LLC for tourism activity. The business must have a Tourism manager with a Diploma or Degree in Tourism at the time of company registration. Businesses that usually apply for a tourism license are –
• Cruise boat rentals
• Travel agencies
• Floating restaurants
• Tourist camps
An agriculture license is suited for owners of livestock farms, arable land, and fisheries. It is also applicable to individuals who –
• Cultivate and harvest crops
• Trade of crops and pesticides
Businesses that install greenhouses or provide agricultural consultancy also need to apply for an agricultural license.
A craftsmanship license is meant for people to practice a craft to sell for a profit. A craftsman provides their skills and physical effort as part of their services, such as carpenters, blacksmiths, and plumbers. Any company that plans on hiring a craftsman’s services must apply for a craftsmanship license.
Each application would require a local sponsor, typically an individual with no liability or equity participation in the business. The individual cannot be a person who either takes part in the management or represents the office. The UAE sponsorship will also have a fixed annual fee.
Once you get your trade license sorted, you can move on to the next step of setting up your business in the UAE. Because a company is nothing without its workforce, we recommend you partner with the best recruitment outsourcing firm to find qualified and experienced staff for your organisation. At TASC, our consultants are also well-versed in the legal aspects of the UAE, making it easy for you to launch & operate your new business compliantly.